Aeva Technologies, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Aeva designs FMCW-based 4D LiDAR and related software. On March 12, it completed its business combination with InterPrivate Acquisition Corp. (IPV), accounted for as a reverse recapitalization; prior-period financials reflect Aeva, Inc. as the accounting predecessor.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Revenue | $0.308 million | $0.527 million |
| Gross profit / gross margin | $0.128 million / 42% | $0.250 million / 47% |
| Operating expenses | $20.255 million | $7.247 million |
| Operating loss | $20.127 million | $6.997 million |
| Net loss | $19.458 million | $6.852 million |
| Net loss per share, basic and diluted | $0.12 | $0.05 |
| Cash used in operating activities | $14.797 million | $5.713 million |
At March 31, cash and cash equivalents were $469.405 million and marketable securities were $53.472 million, totaling $522.877 million. Current assets were $526.694 million versus current liabilities of $6.357 million. The company reported $13.552 million of total liabilities, including $6.142 million of operating lease liabilities and $2.346 million of warrant liabilities; no borrowings are reported. Operating cash outflow plus $0.669 million of property and equipment purchases was partly offset by $513.747 million of financing cash inflow, principally from the business combination and PIPE.
Material changes versus prior year
- Revenue fell 42%, primarily because Q1 2020 included $0.4 million of non-recurring engineering revenue; higher prototype sales partly offset the decline.
- Gross margin declined from 47% to 42%, mainly reflecting the prior-year quarter’s higher-margin engineering services.
- Research and development expense rose 114% to $11.379 million, driven by higher payroll, materials and stock-based compensation. General and administrative expense rose to $8.217 million from $1.304 million, including higher payroll, professional fees, stock compensation and insurance.
- Net loss widened by $12.606 million. Operating cash use increased, while the financing inflow substantially increased cash from the $24.624 million year-end balance.
Outlook, commentary and risks
- Management expects operating losses to continue as it invests in product development and says available cash and marketable securities should fund operations and capital expenditures for at least 12 months from issuance of the financial statements.
- Aeva says commercial product deliveries are not expected before 2024 and could occur later or not at all. Current sales are prototypes and engineering services for customers’ development and testing programs; commercialization depends materially on customer programs advancing.
- Management expects R&D, G&A and sales and marketing spending to increase, including costs of public-company compliance. It anticipates gross-margin improvement with commercialization and scale, but provides no quantified financial guidance.
- Key risks include customer and program concentration, uncertain LiDAR adoption and competition, lengthy development cycles, reliance on third-party and potentially limited-source suppliers, manufacturing scale-up, pricing pressure, and COVID-19-related uncertainty. Five customers represented 94% of Q1 revenue; two customers represented 78% of accounts receivable at quarter-end.
- Management disclosed material weaknesses in financial reporting controls, including warrant accounting and Aeva’s close and reporting processes. Disclosure controls were deemed ineffective at quarter-end; remediation was being developed, including hiring experienced accounting personnel.
- The company recorded a $0.668 million gain from the change in fair value of private placement warrant liabilities. It adopted lease accounting in January 2021 and recognized new operating lease assets and liabilities, including for a Milpitas facility. Two stockholder lawsuits related to the business combination were voluntarily dismissed.
Important facts for investors to verify
- Progress toward customer design wins, production agreements and the stated 2024-or-later commercial delivery timeline.
- Cash use and investment spending against the stated liquidity runway, and whether additional financing may be needed.
- Customer concentration, program cancellations or delays, and the status of supplier and manufacturing scale-up.
- Remediation and independent testing of the disclosed internal-control material weaknesses.
- Potential changes in warrant-liability fair value, stock-based compensation and lease commitments.